Hey guys and welcome to Money Talks News, the podcast. It's the podcast that makes you richer one day at a time. I'm your host, Stacey Johnson. Today we're going to talk about strategies to deal with market downturns. Uh, as I'm speaking, it is the middle of March. We just had a huge correction. I think the, uh, NASDAQ is down about 14% and the S&P 500 down about 10%.

Hey guys and welcome to Money Talks News, the podcast. It's the podcast that makes you richer one day at a time. I'm your host, Stacey Johnson. Today we're going to talk about strategies to deal with market downturns. Uh, as I'm speaking, it is the middle of March. We just had a huge correction. I think the, uh, NASDAQ is down about 14% and the S&P 500 down about 10%.

Largely because of uh uncertainties surrounding tariffs. But in any case, it doesn't really matter why. Um, the market's down. What do you do when you're confronted with a bad market? You're in the right place. I've been doing this for 45 years. I've seen lots of down markets. In fact, uh, 1980.

Largely because of uh uncertainties surrounding tariffs. But in any case, it doesn't really matter why. Um, the market's down. What do you do when you're confronted with a bad market? You're in the right place. I've been doing this for 45 years. I've seen lots of down markets. In fact, uh, 1980.

1987, the start, the crash of 1987 is when I got started in television news. So from that day to this day, I've been through lots of crashes. So I'm gonna give you a few things, specific things that you should focus on when you're dealing with a market that's falling. OK, first of all, don't panic.

1987, the start, the crash of 1987 is when I got started in television news. So from that day to this day, I've been through lots of crashes. So I'm gonna give you a few things, specific things that you should focus on when you're dealing with a market that's falling. OK, first of all, don't panic.

Yeah, you've been to a party and somebody, maybe somebody had a heart attack and they fall, they get cut, whatever it is, and some of the people there are freaking out, and some of the people get really calm. Like my wife is a nurse practitioner, so if something bad happens to somebody, she's, she's Johnny on the spot, you know, she didn't get freaked out, she just takes care of business. And you need to be like that in the stock market. Now, if you find yourself panicking, you're getting a message. And this is a great opportunity.

Yeah, you've been to a party and somebody, maybe somebody had a heart attack and they fall, they get cut, whatever it is, and some of the people there are freaking out, and some of the people get really calm. Like my wife is a nurse practitioner, so if something bad happens to somebody, she's, she's Johnny on the spot, you know, she didn't get freaked out, she just takes care of business. And you need to be like that in the stock market. Now, if you find yourself panicking, you're getting a message. And this is a great opportunity.

for you to listen to that message and adjust it. And here's what that message is. You got too much money in the stock market. You know, you know how they, they have all this stuff, um, take your age from 100 and put that amount of money in the stocks, take your age from 120, or have, or have this bullshit. None of that matters. Here's what matters. Obviously, stocks do better than other investments over time. Otherwise, no one would use them because they have risk. Well, if

for you to listen to that message and adjust it. And here's what that message is. You got too much money in the stock market. You know, you know how they, they have all this stuff, um, take your age from 100 and put that amount of money in the stocks, take your age from 120, or have, or have this bullshit. None of that matters. Here's what matters. Obviously, stocks do better than other investments over time. Otherwise, no one would use them because they have risk. Well, if

If they do better than other investments over time, then obviously you would have as much money as you can in those investments. However, if you lose sleep at night, then it ain't worth it. So the amount of money you should have in stocks is the amount of money it takes until you start freaking out. So if you freaked out because the stock market fell 10% in the last few weeks, you may have too much money in the stock market. I'm down a ton like everybody else who's in the stock market.

If they do better than other investments over time, then obviously you would have as much money as you can in those investments. However, if you lose sleep at night, then it ain't worth it. So the amount of money you should have in stocks is the amount of money it takes until you start freaking out. So if you freaked out because the stock market fell 10% in the last few weeks, you may have too much money in the stock market. I'm down a ton like everybody else who's in the stock market.

But it doesn't bother me. I've been here before. I don't have my, my, my life savings is not a risk. I have plenty of dry powder because I've learned over time that it's important for me to, to have enough on the side, on the sidelines, so I'm not worried when the market falls. I'm expecting it to fall. I'm ready for it to fall, and I'm not freaked out when it falls. Am I happy? Obviously not, but I'm not gonna.

But it doesn't bother me. I've been here before. I don't have my, my, my life savings is not a risk. I have plenty of dry powder because I've learned over time that it's important for me to, to have enough on the side, on the sidelines, so I'm not worried when the market falls. I'm expecting it to fall. I'm ready for it to fall, and I'm not freaked out when it falls. Am I happy? Obviously not, but I'm not gonna.

Freak out. So if you're in a situation where you panicked, that's #1, then you got too much money in the stock market, period. OK. Number 2, maintain a long-term perspective. You know, whenever something bad happens to you, it doesn't matter what it is, you're gonna say, well, life sucks. I mean, it's over. I mean, my life is ruined, blah, blah, blah. You're not looking at the long term. If you're in the stock market for the short term, I can't help you.

Freak out. So if you're in a situation where you panicked, that's #1, then you got too much money in the stock market, period. OK. Number 2, maintain a long-term perspective. You know, whenever something bad happens to you, it doesn't matter what it is, you're gonna say, well, life sucks. I mean, it's over. I mean, my life is ruined, blah, blah, blah. You're not looking at the long term. If you're in the stock market for the short term, I can't help you.

Because let me tell you, here's something, this is something I invented a long time ago. Your comfort level, or, or actually, your odds of success in the stock market, are inversely proportional to how much time you have. In other words, if you need to make money today, flip a coin. I have no idea what the stock market's gonna do. But if you're, if you're going to have a 20 year time horizon, then what the hell are you doing?

Because let me tell you, here's something, this is something I invented a long time ago. Your comfort level, or, or actually, your odds of success in the stock market, are inversely proportional to how much time you have. In other words, if you need to make money today, flip a coin. I have no idea what the stock market's gonna do. But if you're, if you're going to have a 20 year time horizon, then what the hell are you doing?

About a little drop in the market today, and I, I would encourage you to keep that 20 year time horizon. That's what stocks are for. Should never have money in the market you're going to need within 5 years. So anyway, this is an opportunity to maintain that long term perspective, and that helps you not worry so much about what happened today. Also, this is an opportunity to look at what your risk tolerance is. As I said at the outset.

About a little drop in the market today, and I, I would encourage you to keep that 20 year time horizon. That's what stocks are for. Should never have money in the market you're going to need within 5 years. So anyway, this is an opportunity to maintain that long term perspective, and that helps you not worry so much about what happened today. Also, this is an opportunity to look at what your risk tolerance is. As I said at the outset.

Um, if you're gonna freak out, then maybe you don't want to be in stocks at all. I mean, you know, my, my wife doesn't like stocks at all. I've been doing it for 45 years. Um, she, she doesn't like doing it at all. And to me, here's an analogy for you, you can go through life without having a partner.

Um, if you're gonna freak out, then maybe you don't want to be in stocks at all. I mean, you know, my, my wife doesn't like stocks at all. I've been doing it for 45 years. Um, she, she doesn't like doing it at all. And to me, here's an analogy for you, you can go through life without having a partner.

Uh, because that way you don't risk anything. You're never gonna have your heart broken if you never go out on a date, right? But you know what? If you don't go out on a date, you're never gonna feel what love is, and love is the most awesome thing that there is. So you've gotta take, you gotta take a chance. In other words, and whether it's in love or money, you gotta take a chance, and this is an opportunity for you.

Uh, because that way you don't risk anything. You're never gonna have your heart broken if you never go out on a date, right? But you know what? If you don't go out on a date, you're never gonna feel what love is, and love is the most awesome thing that there is. So you've gotta take, you gotta take a chance. In other words, and whether it's in love or money, you gotta take a chance, and this is an opportunity for you.

to recognize what that risk tolerance is, you don't have to take a huge chance or maybe you just want to take a little chance, but recognize what that opportunity is. OK, so we've got don't panic. We've got keep your long term perspective. We've got learn your risk tolerance. Now, another thing this is really valuable for, and by the way, I'm going to tell you what I've been doing with my money lately too in this market downturn. Dollar cost averaging, dollar cost averaging, it's probably how you invest in your 401k. It simply means putting a little bit in a fixed amount of money in.

to recognize what that risk tolerance is, you don't have to take a huge chance or maybe you just want to take a little chance, but recognize what that opportunity is. OK, so we've got don't panic. We've got keep your long term perspective. We've got learn your risk tolerance. Now, another thing this is really valuable for, and by the way, I'm going to tell you what I've been doing with my money lately too in this market downturn. Dollar cost averaging, dollar cost averaging, it's probably how you invest in your 401k. It simply means putting a little bit in a fixed amount of money in.

To a variable asset every month or regular intervals as you're putting in $100 a month at your 401k. This dollar cost averaging is proven, it's mathematically proven to work providing you're investing in an asset that ultimately goes up over time. OK, so putting in money and this, and this, by the way, is what I've done. I have a whole bunch of cash in one of my retirement accounts because I'm keeping a high cash level if you.

To a variable asset every month or regular intervals as you're putting in $100 a month at your 401k. This dollar cost averaging is proven, it's mathematically proven to work providing you're investing in an asset that ultimately goes up over time. OK, so putting in money and this, and this, by the way, is what I've done. I have a whole bunch of cash in one of my retirement accounts because I'm keeping a high cash level if you.

Been following me at all, it's because I think the stock market is overvalued. I mean, forget this idiotic tariff stuff that's been going on. It's what caused the market to fall most recently. But the market was overbought or yeah, overbought anyway. It was too high. And I haven't, so I, I haven't been buying a lot of stock. I've been keeping a lot of money in cash. So when the market fell 3 times now, 3 times now, I've gone and bought some S&P 500 index fund.

Been following me at all, it's because I think the stock market is overvalued. I mean, forget this idiotic tariff stuff that's been going on. It's what caused the market to fall most recently. But the market was overbought or yeah, overbought anyway. It was too high. And I haven't, so I, I haven't been buying a lot of stock. I've been keeping a lot of money in cash. So when the market fell 3 times now, 3 times now, I've gone and bought some S&P 500 index fund.

Uh, in, in one of my retirement accounts, the lower it goes, the more I buy, right? cause I know sooner or later it's gonna come back. The dollar cost average is a great thing to do, uh, when the markets are down. Be ready for it to go down more. I mean, I've done it 3 times. Obviously, the last, I did the last time I did it was yesterday.

Uh, in, in one of my retirement accounts, the lower it goes, the more I buy, right? cause I know sooner or later it's gonna come back. The dollar cost average is a great thing to do, uh, when the markets are down. Be ready for it to go down more. I mean, I've done it 3 times. Obviously, the last, I did the last time I did it was yesterday.

Uh, and 2 times before, the market continued to fall. So those, those two investments I made in the last week haven't done very well, but I think they will when the market ultimately turns around and goes back up. If you think the market's never gonna turn around and go back up, then sell all your stocks and buy a shotgun and some canned goods.

Uh, and 2 times before, the market continued to fall. So those, those two investments I made in the last week haven't done very well, but I think they will when the market ultimately turns around and goes back up. If you think the market's never gonna turn around and go back up, then sell all your stocks and buy a shotgun and some canned goods.

If you do think the market's gonna go up sooner or later, and you've got that time, then start averaging in. Well, prices are lower. OK. Number 4, tax loss harvesting. You do you, you do realize when you sell stocks at a loss, you can deduct that loss unlimited amount uh against gains that you may take during the year, but you can also use it to offset some ordinary income. So this is a good opportunity for you to take a loss.

If you do think the market's gonna go up sooner or later, and you've got that time, then start averaging in. Well, prices are lower. OK. Number 4, tax loss harvesting. You do you, you do realize when you sell stocks at a loss, you can deduct that loss unlimited amount uh against gains that you may take during the year, but you can also use it to offset some ordinary income. So this is a good opportunity for you to take a loss.

If, if you've got one, you don't like the stock anymore, or, or there's another stock you can switch into that's similar. For example, I was down on gold stock last year, I sold that gold stock and bought another one. you can't buy the same stock within 30 days or else you can't take that loss. Uh, but I bought a similar stock. So I stayed basically in the same position, but took a tax write-off on my taxes.

If, if you've got one, you don't like the stock anymore, or, or there's another stock you can switch into that's similar. For example, I was down on gold stock last year, I sold that gold stock and bought another one. you can't buy the same stock within 30 days or else you can't take that loss. Uh, but I bought a similar stock. So I stayed basically in the same position, but took a tax write-off on my taxes.

So, so this is a great opportunity for you to do that. And, and the last thing I'm gonna tell you is this is also a good opportunity for you to buy quality. Do not buy crap, OK? Do not buy meme stocks, but this is a great opportunity. You wanna, you wanna own a stock like Amazon or Apple or Microsoft. These companies have all gotten

So, so this is a great opportunity for you to do that. And, and the last thing I'm gonna tell you is this is also a good opportunity for you to buy quality. Do not buy crap, OK? Do not buy meme stocks, but this is a great opportunity. You wanna, you wanna own a stock like Amazon or Apple or Microsoft. These companies have all gotten

In the last couple of weeks, and this is a good opportunity maybe for you to start taking a little bit of a position. Again, average in by little Microsoft today. Now I own all these stocks. I'm like I didn't buy those recently, but I did buy Alibaba, which is a stock I've been watching for a long time. I bought it twice actually, uh, and it's been doing very well. So anyway, keeping an eye on quality stuff. When I say quality, what do I mean? Not just a company that you've heard of, a company with a moat. It's gonna be really hard for you to overcome Apple's 1 billion subscribers.

In the last couple of weeks, and this is a good opportunity maybe for you to start taking a little bit of a position. Again, average in by little Microsoft today. Now I own all these stocks. I'm like I didn't buy those recently, but I did buy Alibaba, which is a stock I've been watching for a long time. I bought it twice actually, uh, and it's been doing very well. So anyway, keeping an eye on quality stuff. When I say quality, what do I mean? Not just a company that you've heard of, a company with a moat. It's gonna be really hard for you to overcome Apple's 1 billion subscribers.

Uh, you know, it's gonna be really hard for you to beat Microsoft, uh, you know, or, or Amazon. How about Amazon? Great company. And, and now it's cheaper than it was a couple of weeks ago. So if you were a buyer of individual stocks, this is a great opportunity for you to start creating a position. I'm not saying the market is about to turn around any second, it may well go lower, because I think that we've got some really stupid, um, fiscal things going on in our country right now. Uh, but nonetheless,

Uh, you know, it's gonna be really hard for you to beat Microsoft, uh, you know, or, or Amazon. How about Amazon? Great company. And, and now it's cheaper than it was a couple of weeks ago. So if you were a buyer of individual stocks, this is a great opportunity for you to start creating a position. I'm not saying the market is about to turn around any second, it may well go lower, because I think that we've got some really stupid, um, fiscal things going on in our country right now. Uh, but nonetheless,

I'm, I'm putting my money where my mouth is. I did go ahead and buy some stocks, and I think you should do the same gradually and keeping some powder dry. So real quick, all done now. We got not panicking. We got maintaining your long-term perspective. We've got learning your risk tolerance. We've got averaging in with dollar cost averaging.

I'm, I'm putting my money where my mouth is. I did go ahead and buy some stocks, and I think you should do the same gradually and keeping some powder dry. So real quick, all done now. We got not panicking. We got maintaining your long-term perspective. We've got learning your risk tolerance. We've got averaging in with dollar cost averaging.

We've got um uh harvesting your tax losses, and then finally, we have um picking up quality stocks while they're cheap. So that's the advice I give you for this market downturn, or any of the other ones we're likely to have as we go forward.

We've got um uh harvesting your tax losses, and then finally, we have um picking up quality stocks while they're cheap. So that's the advice I give you for this market downturn, or any of the other ones we're likely to have as we go forward.

Yeah, now I want you guys to do one thing for me before you leave. I want you to follow me. I want you to become a member of Money Talksnews.com. Doesn't cost a dime. We'll make you richer. So go to Money TalksNews.com, get our free newsletter, and then I want you to follow me. I want you to tell your friends, and I want you to be a loyal listener and watcher of this podcast. Hey, I love you. Do you love me? Show me, and I'll see you right here next time.

Yeah, now I want you guys to do one thing for me before you leave. I want you to follow me. I want you to become a member of Money Talksnews.com. Doesn't cost a dime. We'll make you richer. So go to Money TalksNews.com, get our free newsletter, and then I want you to follow me. I want you to tell your friends, and I want you to be a loyal listener and watcher of this podcast. Hey, I love you. Do you love me? Show me, and I'll see you right here next time.